1,3 Butadiene Market Trends

Growth Drivers

• Rapid expansion of the automotive sector: 1,3 butadiene is a crucial raw material used in synthetic rubber and engineering plastics essential to the automotive industry. As the sales of various types of automobiles is rapidly increasing, the demand for this product is also rising. As per a study by Research Nester, global passenger car sales reached around 67.2 million units in 2023, a significant increase of 11.2% from the previous year. Several governments across the globe are enforcing fuel efficiency and low-emission tire regulations, fueling the demand for advanced synthetic rubbers, derived from butadiene. Along with this, the rising production of electric vehicles that require durable, low-rolling resistance tires is expected to boost. According to a 2024 report by the International Energy Agency (IEA), more than 14 million different types of electric vehicles were sold in 2023, 95% of which were in the U.S., Europe, and China.
• Rising construction activities: 1,3 butadiene is widely used in the infrastructure and real estate sector in the form of adhesives and sealants, synthetic rubber, and ABS plastics. The rapidly expanding construction activities and infrastructure developments across many parts of the globe is fueling the demand for 1,3 butadiene and its derivatives. In addition, rising government infrastructure investments is expected to boost 1,3 butadiene market growth during the forecast period. For instance, according to the India Brand Equity Foundation, the government of India allocated USD 132.6 billion for infrastructure development under the PM Gati Shakti Initiative 2024-25. 

Challenges

• Price volatility and supply chain disruptions: Though the demand for 1,3 butadiene is rapidly increasing, fluctuations in crude oil and natural gas prices and supply imbalance can affect the overall butadiene production costs. In addition to this, geopolitical tensions, trade restrictions, logistical issues, and dependency on key suppliers, including the U.S., China, and South Korea can impact the global supply.